March 13 (Bloomberg) -- Elbit Systems Ltd. gained the most
this year after Israel’s largest non-governmental defense
company swung to profitability as sales grew even as U.S. and
European defense spending declined.

The shares increased 3 percent, the most since Dec. 31, to
144.3 shekels at the close in Tel Aviv, compared with a 0.1
percent drop for the benchmark TA-25 Index. Shares have declined
3.3 percent this year as the company struggles with reduced
defense spending in the U.S. and Europe. The S&P Aerospace &
Defense Index has added 8.2 percent in the same period.

Elbit, which got 51 percent of revenue from the U.S. and
Europe in 2011 according to data compiled by Bloomberg, is
hunting for new markets as American defense spending may be cut
by about $500 billion over 10 years. The company reported a 0.2
percent gain in fourth-quarter revenue to $844 million,
compared with two estimates of $843 million and $842 million
compiled by Bloomberg.

“Considering declining budgets and intensifying
competition in the growth regions, even low-digit growth is an
achievement,” Ella Fried, a senior analyst at Bank Leumi Le-Israel Ltd. in Tel Aviv said today by phone. “We do not expect
a jump in growth in 2013 and no significant acquisitions.”

Profit for the quarter rose to $57.2 million from a loss of
$13 million in the year-earlier period when the company reported
a one-time expense, the company said.

New Orders

Shares of Haifa, Israel-based Elbit have rebounded from
their five-year low on Aug. 28 as the company received orders
from the Israeli government and added Indian and Brazilian
ventures to its operations.

The company said in February a unit set up a joint venture
with Pune, India’s Bharat Forge Ltd. to provide artillery and
mortars systems to India’s Ministry of Defense and other
customers. The company also said last month its Brazilian unit
signed an agreement with Embraer Defesa e Segurança SA to
jointly pursue projects in the unmanned aircraft systems market.
Elbit said in December it got $315 million in orders from the
Israel’s Ministry of Defense.

“I don’t see a drop in the flow of orders in 2013,”
Joseph Ackerman, outgoing Elbit chief executive officer, said at
a press conference in Tel Aviv today, adding that sales to
India, Brazil and Australia will offset a drop in
sales to the U.S.

Growth engines for the company over the next decade will
include cyber-defense, civilian and the simulators sectors,
Ackerman said. The company is constantly seeking mergers and
acquisitions, he said, with “the next growth spurt coming with
the next acquisition.”